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tv   Bloomberg Technology  Bloomberg  August 8, 2018 5:00pm-6:00pm EDT

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emily: i'm emily chang in san francisco and this is "bloomberg , technology." fallout from elon musk costs plan to take -- elon musk's plan to take tesla private. firstsnap reporting its ever drop in daily users. what is it doing to stay on users' radars? , along down further
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with cryptocurrencies -- other cryptocurrencies. our top story, elon musk could be switching lanes or trying to. he sent shock waves on wall street after tweeting that he is considering taking the company private at $420 per share. the board, apparently not surprised. they knew last week about the proposal, but that's a long way to go to convincing investors the idea is credible. for more, we are joined by max chafkin. with us in washington, bloomberg's ben bain. many are wondering, can he just tweet this in the middle of trading hours and does he have what he needs to back it up? ben: ultimately, the question, to your second point, does he have what he needs to back it up? the sec has been clear that companies or individuals can make announcements about
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material nonpublic information through social media, so, on its face, tweeting this out on twitter is not necessarily a violation. but the issue, as you talk to people, is really going to be does if the apps -- sec decide to look into this, is whether what he said is actually true. the tweet, funding secured. that says, funding secured. people are going to be wondering, what does that actually mean? does he indeed have what that tweet indicates? he double down -- doubled down on it later on tuesday, saying he did indeed have investors. we have to see how this plays out. it's going to come down to how sure was what he said at that time and how much did it actually reflect what the reality was. emily: he did double down, saying, quote, "investor support is confirmed," but we don't have
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any evidence from our sources or bankers close to the company that investor support is indeed confirmed. to your point, that the sec has decided it is ok to disseminate information on social media this way, that dates back to a rule the sec made in 2013 in regard to reed hastings, the ceo of netflix, who at the time announced some pretty important numbers on facebook. the sec decided that was ok. to this point of funding, max, what do we know about who could be supporting it and if indeed they are? max: the universe of possible funders is pretty small. we are talking about sovereign wealth funds. of course, the saudi's -- reports came out just before the tweets started that the saudi public investment fund had up to 5% in tesla. so, you could imagine a big sovereign wealth fund, a big tech venture investor like soft
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and -- softbank, for a big tech company -- or a big tech company, like apple or google. companies that are normally targets for leveraged buyout's have profits, and that's not something tesla has, so it would be more like trying to turn tesla into something like uber. a high potential private company with a very high valuation. emily: meantime, this is a company -- librarythis chart in my showing tesla's free cash flow. this is a company that has never made money and has been burning billions of dollars of cash every year, essentially. ben, what are your sources on the regulatory side saying about what happens next? what are they going to look into? ben: look, i mean, this is maybe to the point of why ceo's and corporate executives don't usually announce this kind of
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stuff on twitter. this is a long, deliberative process. even if this were to move forward, we are talking months here of back and forth where, probably the board would have to warm some kind of -- form some kind of special committee to actually look at this. there are going to be lots of lawyers. there is going to be lots of back and forth. and don't forget, investors who feel this isn't the right deal could also take legal action. what we are basically hearing right now is that we have to see how this is actually going to play out. the tack that elon musk takes here will go a long way in also determining how he is going to have to deal with delaware state law. tesla is a company that is registered in delaware. a're kind of trying to get sense of where this goes and the funding question, i think, is really central to all of that. he says he has funding. where is the funding going to come from, and what does that
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deal ultimately look like? emily: max, what do you make of a potential softbank-tesla tieup? max: it makes a certain sense. my read in terms of close reading what musk has said publicly and on twitter, he is hoping to cobble this together from perhaps multiple sources. he said that he hopes existing shareholders -- probably having in mind being institutional shareholders maintaining their stakes. maybe that makes some sense. then you buy out whoever is left from money from softbank and maybe one or two other investors. emily: some other details. apparently, elon musk and son talked last year about the possibility of going private. obviously, they didn't come to an agreement then, so who knows what kind of agreement they may or may not have now. max, what our next steps on the
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tesla side?the chain of evidence is intriguing. tweeting, than the blog post, the email -- then the blog post, the email, the board. what does tesla need to prove here? max: it's a crazy story. when you look at the dell buyout, that thing played out over months. as ben said, there were committees, lawyers, bankers. all this seems to have happened, sort of like the best case scenario, in terms of them planning ahead, was a week. you after think there is so much to be figured out. all of this will be playing out in an environment where tesla is very polarizing. you still have these short-sellers, probably feeling quite a bit of pain now. there are still plenty of skeptics. you have this anonymous, right now, anyway -- this enormous, right now, anyway, distraction. buyouts when they are
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managed well lead to litigation, sniping, all these things. when it happens in this kind of nutty way, you just imagine it could be even worse. emily: i should add that sources tell us there are no active talks between softbank and tesla now. as far as our sources know. say -- musk did say this is not about control. he has enough control. lots to continue to hash out. max chafkin and then bang, thank you -- and ben bain, thank you both. salesforce is the latest tech company to embrace the idea of having two chief executives. it has produce -- promoted keith block to run the company alongside cofounder marc benioff. he serves as vice-chairman and will remain a director. daily active users on
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the decline. are snap's best days behind it? we will discuss next. if you like bloomberg news, check us out on the radio. listen on the bloomberg app and in the u.s. on sirius xm. this is bloomberg. ♪
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postedon tuesday, snap quarterly revenue gains that show it can compete in the mobile app market dominated by facebook and google. the catch, snap reported its first ever decline in daily active users. that worried analysts who were looking for rapid growth, yet snap did win the approval of prince al-waleed bin talal, who has taken a big stake. has snap hit its peak, or is this a bump in the road? for more, we have an analyst who has a perform rating on the stock and our own david kirkpatrick. how substantial is this decline in users? >> it is not a great surprise.
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they warned us some changes they made to the app caused disruption. the question investors are asking is can they return to growth and over what time period. they've been struggling with the android platform. user experience and android -- on android is somewhat inferior to the ios. it is in test right now. we will see if that has the impact of growing android users or returning the growth to android users, both in the u.s. and globally. as of now, they did slip sequentially, and now the big question is whether this trend continues. emily: right. david, this is not something that we saw at facebook in the early days or even twitter. i mean, do you think snap's best days could be behind it, given we are seeing a sequential decline fairly early in its lifecycle? david: they have a problem that facebook never really had, and to some extent facebook tried to get to twitter.
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they have a head-to-head competitor copying their every move, and that's instagram. that is slamming them. on the other hand, their ability to withstand that thus far is generally impressive, even though they did show this slight decline in daily active users. the fact that revenue is going up shows that advertisers, which is the key constituency, are still pretty much happy. emily: so, what about the revenue, peter? we're seeing significant revenue growth. we are seeing that they are able to compete in a market where it is kind of a duopoly. what do you make of the fact that even though the user trends are not promising, the revenue is? peter: revenue growth in the quarter was over 40%, and that's impressive, but when you dig deeper and look at the regions,
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you see some trends that could signal some alarm. revenue growth in the u.s. was 20%, and the question is whether that decelerates further. revenue per user growth in the u.s. was only 12%, comparing to much higher growth in europe and rest of world. so, what investors are looking at is how much more room do they have? even mind that snap's business in the u.s. -- keep in mind that snap's business in the u.s. is only 3% the size of facebook, yet facebook last quarter almost grew twice as fast. you have a question of here, what is the headroom on monetization per user? it's a demographic skew and issue here. that's our thesis. the use skew of the snap user prevents -- presents a limiting factor on growth.
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they have to expand the older users. competitor. a key they need more older users to open up the categories of advertisers that can spend significant sums on the platform. emily: instagram, a key
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competitor, also copying a lot of snap's features, sometimes doing them better than snap has. what do you think of that thesis and whether snap can succeed at getting older users? david: it's a tough challenge. they have done a good job with product innovation over time, even if every time they do anything, it is copied by instagram. they have been quite innovative. i wouldn't put it past them, because i think it is a well-managed, creative company, that they might come up with some way to appeal to older people, but even the brand sort of shouts teenagers and young people. to get older people to use this really would be more than even a product design change issue. it would be a branding issue, and it could turn off the younger people they still depend on, so that's challenging. the one thing i don't think anybody should ever have any illusions, snap is never going to be a scale of facebook. it's a good company. it probably still has some potential growth, but don't think it is the next facebook. it's never going to be. emily: or even the next twitter, potentially. peter, what should we read into talal'sl-waleed bin investment? peter: he makes a lot of investments. i don't read too much into it at this point. the success of shares of snap will succeed or fail based on the revenue growth, based on their ability to expand their audiences. they had a good quarter. they beat on revenue and ebitda. we believe they will probably turn positive potentially in 2021, but what is the ultimate margin profile and what kind of revenue growth do you need to get there? what does the revenue growth in the u.s. look at one year -- look like one year, two years from now? twitter, twice the size of snap, growing a bit faster. emily: peter, thank you so much.
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david, you're sticking with me. snap is also betting big on augmented reality advertising, but of course it will face competition from facebook and apple. how will it hit the bottom line? bloomberg tech's sarah frier reports. sarah: snap tries to be at the cutting edge of what's next, rum spectacle to facial recognition filters -- from spectacle to facial recognition filters. now they are betting big on augmented reality advertisement. the company even opened up online studios to make it easier for brands to build ads that can be overlaid on people's pictures and videos. on snapchat, users can manipulate their pictures or videos using augmented reality lenses and animations, some of which are branded, like sunglasses reflecting domino's pizza. people then send those photos or videos to friends, potentially becoming the star of the ad. the company's second-quarter earnings topped analysts' suggestions -- analysts' suggestions.
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more than 80 million people in the u.s. engage with ar monthly. 120se is projected to hit million monthly users by 2021. but snap is already facing competition. facebook, which has copied snap before, announced in july that it is also getting into the ar ad space, and they are not alone. apple is also encouraging developers to produce content using its ar kit. here to tell us more, sarah frier. i feel like we should be going clubbing after listening to that music. talk to us a little bit about the actual potential for ar advertising to significantly augment, if you will, the amount of revenue that snap is bringing in. sarah: this company is trying to make the case that it is a camera company, that it is something more than just a social communication platform,
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that they are building something that can then translate to snap spectacles down the line and other uses beyond the app itself. the problem there is that this stuff is hard to build. they are getting better at it. advertisers are getting more comfortable with it. whether it turns from an experiment, something fun to do, to something that is a must have part of the advertising budget -- that's something that has been more difficult for advertisers to come to terms with. they have to be more creative. it's not as simple as just putting an ad in a new speed. they have to come -- in a newsfeed. they have to come up with a concept. it's what snap is known for, this kind of creativity, but it is hard to scale it as well. emily: quickly, can snap be more innovative than apple or facebook or is it going to become a commodity? sarah: in many ways, snap has been more innovative, but then you have the copycatting.
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facebook has been doing these ads, too. their instagram stories, they say, is sort of the future of the business. they are trying to drive a lot of advertisers to do business within stories. it's going to be a challenge. emily: thanks so much for that report. up next, tesla is only the latest example of saudi arabia's move into tech. what's the endgame?we will discuss. this is bloomberg. ♪ this is bloomberg. ♪
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emily: as we have been discussing, saudi's sovereign wealth fund just acquired a significant stake in tesla, ahead of elon musk's announcement that he is considering taking the company private. the kingdom is betting big on cleantech to feed growing domestic energy consumption. it's all part of vision 23, a plan to reduce saudi dependence on oil and diversified its
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economy -- and diversify its economy. here to discuss, damian. tell us more about why they made this investment and how it fits into the broader endgame strategy. >> when it comes down to saudi arabia, as most oil-producing economies, it's all about oil. oil comprises 90% of export revenue for saudi arabia, and it is 40% of gdp. as with most emerging markets, and saudi arabia is an emerging market, they are trying to wean themselves off of oil dependence. this has been time-tested again and again. the challenge here is how do they do it. it is indeed a real challenge. the public investment fund, which is the entity that has made the investment into tesla -- that's chaired by the royal crown prince mohammad bin
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salman. it goes hand-in-hand with other investments we have seen of late, committing to an investment in softbank's vision fund, an investment in over. -- in uber. they have a stake in one of the largest clean energy producers in the state today. emily: should we look at this is -- as a strategic investment, or is this opportunistic? damian: it is definitely a strategic investment. one of the pillars of vision 2030 is clean energy. if you just look at the core competencies in terms of what tesla does, battery technology, energy storage, solar panter -- manufacturing, this goes hand-in-hand with what the kingdom is trying to do and how it is trying to diversify its away from oil dependence -- diversify away from oil
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dependence. emily: are they actually succeeding? damian: if you look at unemployment, unfortunately, unemployment is at its highest point in the last decade. 250,000 young workers are entering the saudi workforce each and every year. real, fundamental economic issues that the kingdom needs to contend with. that being said, they've made some real progress in terms of structural reform. they have removed some of the work subsidies. they have implemented a value added tax. from that perspective, if you take the long-term perspective from the kingdom of saudi arabia, yeah, they have made some real progress. again, it is still early days. emily: damian sassower, thanks so much. we will continue to try to get more information on that stake in tesla. coming up, twitter ceo feeling the heat, especially on twitter. why jack dorsey's decision to allow conspiracy theorist to a
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operate online -- to continue to operate online has the twitterverse outraged. plus, bitcoin's roller coaster year continues. this is bloomberg. ♪ two, down and back up.
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emily: this is "bloomberg technology." i'm emily chang in san francisco. twitter's ceo jack dorsey is being reamed for his defense of twitter refusing to take down the account of the infamous conspiracy theorist alex jones and his show "infowars." he laid out his reasoning in a series of tweets. "the reason is simple: he hasn't violated our rules." dorsey tweeted, "if we react outside pressure rather than straightforward principles, we become a service that is constructed by our political views -- personal views that can swing in any direction.
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that's not us." this comes after jones and "infowars" were banned from others. and we have david kirkpatrick and alistair barr. david, is jack right or wrong? david: i respect him for what he is saying, because he is at least trying to come up with some sort of consistency, but i know there are plenty of people who have been criticizing tweezer -- twitter in the last day for focusing more on being consistent in that way when it's a very big public person like alex jones and not being as consistent when it comes to the myriad infractions of their rules that happen every day, some of which they take down and some of which they don't. we are at a weird point in the history of these platforms, which is that they have become such a miasma of conflicting behaviors, an absolute lack of
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governmental oversight and regulation and law, and they are all sort of struggling with the question are we media or are we not. twitter -- it is at least jack's position that twitter is not media. twitter is a neutral platform, therefore it is not our role to determine what people say or don't say, as long as they are not actively harassing someone or something like that. i respect that. he moves theaid, ball forward by shifting the work to journalists. he is saying, "accounts like jones can substantially's -- sensationalize issues." serves the public conversation best. we don't mean to shift the work here. we can't be a useful service without the integrity journalist s bring. journalists have responded to this. notjournalist saying, "i'm
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getting paid to clean up your website for you." are we getting paid to clean of twitter for jack dorsey? tostair: we are getting paid -- one of the classic arguments that not just twitter makes is if there is something out there that is wrong on the internet, other people have to get out there and say what's right and make it clear so that they can use that content to refute what was wrong before. those tech companies always say that type of thing. i think that has some validity. i think jack has also tried to avoid falling into a trap with conservative commentators on twitter over the last year or so. they basically say, oh, you are limiting our free speech, it is a first amendment issue, and you shouldn't be allowed to do that. with that decision so far, he
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has taken the opposite tack. carry on. he is basically saying, maybe not just journalists, but everyone else on twitter, if you feel strongly about it, you can get on twitter and refute what he is saying. emily: twitter has made many mistakes over the years, not making it clear what the rules actually are, then being capricious about how they enforce them. there is an argument to be made that if alex jones doesn't violate the rules, then maybe there's a problem with the rules. a former head of communications at twitter hit back at jack, saying, "i think it's the wrong call. jones -- jones' behavior isn't a one off. if your policy does not account for jones-like activity, than the policy isn't -- then the policy isn't serving a healthy conversation." you revisit this decision."
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david, what you make of her argument -- what do you make of her argument? david: i think it's weird that we are in the position of for-profit companies policing the public square. they were never set up to have the capability of doing that. they do have their terms of service and all that. jack things he is doing as good a job as he can do, but it's true that -- jack thinks he is doing as good a job as he can do, but it's true that these companies swing back and forth and do not show consistency because they are being confronted every day by new kinds of situations which they never anticipated. in twitter lost case, they are not profitable enough to basically throw -- in twi tter's case, they are not profitable enough to basically throw any amount of money at any problem they encounter. then you have the point about conservative bias or nonbiased and how they are trying to
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thread that needle. i feel for these companies, but i feel for twitter more than i feel for facebook, because i think facebook has handled it much more poorly than twitter in reality. emily: alistair, jack talks about them needing to create better economic incentives to prevent this kind of behavior. costolowitter ceo dick has also talked about these kind of things. what kind of economic incentives would prevent this kind of behavior? not to mention the fact that this is a private company that is entitled to create its own rules about what it does or doesn't want to allow. alistair: there's already an example of incentive. i don't think it's working very well right now. tifact andd -- poli groups like that, there is some financial incentive for those organizations to go out and fact check the stuff on twitter and other platforms. he he might be referring to
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that. other than that, i would say, scratch your local newspaper. emily: -- subscribe to your local newspaper. emily: what do you think twitter needs to do better? david: oh, jeez. one of the reasons i respect jack is, even in putting out the statement you quoted from, he is trying to articulate something which, granted he hasn't stuck with very well and the company hasn't up with historically -- hasn't stuck with historically that well, but i think all of the companies need to be more candid with the public that they understand they are in an unprecedented situation that they cannot even fully manage and they need help. when he asks for journalists' help, maybe he is not turning to the right places, but they do need to turn to the outside for help. i frankly think government needs to come in and establish some ground rules of what is and is not allowed on these platforms to take a little burden off the commercial players from making these sometimes impossible decisions.
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emily: right. jack certainly knew this would be unpopular when he tweeted it out. david kirkpatrick, thank you so much for joining us. alistair barr, to you as well. bloomberg lp operates a global breaking news network on twitter called @tictoc. shares of match group hit a nine-month high thursday following second-quarter results that beat analyst estimates. revenue jumped. operating income hit $150 million. tinder is viewed as a prominent driver of that success. has -- it now has more than 3.7 million users. still ahead, bitcoin enthusiasts may have just had their hopes crushed. future of the cryptocurrency stand? we will discuss. this is bloomberg. ♪ is is bloomberg. ♪
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markets took a hard hit wednesday after the sec postponed its decision on the proposed bitcoin exchange. it would have been the first financial product of its kind. it reduced the crypto market's value to the lowest since november. this is a $600 billion loss since the peak of crypto media. caroline hyde is joining us from london. the numbers are just so huge when it comes to these losses. why did this happen? caroline: the wind got taken out of the sails. about $500 lost on the price of
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bitcoin alone in six hours. so much momentum had been building about this particular exchange traded fund. the reason people were getting excited about this particular etf is some of the provisions that had been put in place. this was going to be a physically-backed bitcoin etf. they were going to be holding bitcoin and promising an insurance policy in case it got hacked or there was theft. they followed a framework of the ctf see -- of the ctfc. and i think, crucially, this was going to be very hard for retail investors to get into, because the price, the share price of the etf was going to be so high. it was going to be $200,000. this is why we spoke to the likes of vanek. we spoke to ed lopez in
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particular about why this price point was so important. ed: we know that regulators have a concern about individual or retail investors getting into the space because of volatility. at the $200,000 price, you are at accredited investor level. maybe that's a way for regulators to take a small step towards an institutional or regulated product. caroline: but it seems as though they've had to delay or postpone their overall viewpoint at the sec. we know they are nervous about this. they are wary of giving a green light to the cryptocurrency space and the digital assets based, because they are worried about manipulation -- digital asset space, because they are worried about manipulation. this is something they are being very sensitive to, therefore they delayed it even further, though many hoped to get the decision as soon as next week. emily: but there are still pending applications for etf's. we just spoke with a ceo who is
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applying for an etf that includes not just bitcoin, but 10 other cryptocurrencies. are we intimate -- optimistic about future approvals? caroline: i think the market still is hoping. they're hoping the market can institutionalize to a certain extent. this is why so many companies are putting in these proposals for exchange traded funds. you mentioned bitwise. proshares is offering up for basel's. we shouldn't -- offering up proposals. we shouldn't be surprised the sec has delayed this one, because they recently delayed five etf proposals coming from a company. there are plenty out there. momentum has been building at the sec level in itself. one of the commissioners has actually started to vote against these decisions to push back on etf's. had thein july, we legal boss twins, who -- the
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theirsoss twins, had pushed back. but it was a split ruling. i think at some point there will be the institutional comfort that these -- it will be a more liquid way of being able to trade these. notably, that's why we are getting such momentum built into the share price, where these decisions get close, because things -- when gold got in exchange traded fund, we saw gold quintuple in terms of its price point. when you start to see a market built upon, exchange traded funds built upon underlying assets, it makes it so much easier to get into the space. you don't have to set up a bitcoin wallet. you can get into the asset class, and it would drive price momentum. as you can see, look at the chart. we've seen a crushing in the share price, in the prices of overall digital currencies.
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we are down by more than 50% when you look at bitcoin. we've seen some hope. that white line in july and august, we had seen a little bit of stabilization, because there was hope that we would see an etf built on bitcoin, so there is still momentum there going forward. emily: quickly, has there been any good news for cryptos lately? caroline: this is where the sec needs support. they want to see more institutionalization of this asset class. maybe we have some good news in that respect today. it's been reported by bloomberg that goldman sachs is looking at offering a custodian function, basically being able to keep your assets safe. this is crucial for institutional investors to get in, because they want to keep their cryptos in cold storage by taking it off line. they want to ensure there is a safe way to manage their asset. overall, goldman is looking at maybe providing that. i think this is why you shouldn't knock that the sec
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eventually ruling on an etf. it might not be in 2018, but eventually it will come. we will get bigger players being able to get involved. emily: bloomberg's caroline hyde in london, giving us both sides. thanks so much, caroline. raising $400 to be million in a new funding round. the deal would value the san francisco-based startup at $7 billion. it last raised funds in september. ceo for anp with the upcoming episode of "bloomberg's and asked about the current availability of capital in these markets. in the lastvc's three or four years, particularly the last two years, funds and they
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need to find places to invest that. for companies like us, the enterprise software, sas businesses, it's as hot as it has ever been. up, insurance startup lemonade has gotten a lot of attention this year after a high-profile investment him softbank -- from softbank. we will speak with the ceo next. this is bloomberg. ♪
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eats is rolling out a new policy with its fees. it will now be based on proximity to the restaurant. it was previously a flat charge. now fees will be cheaper for nearby restaurants. since its founding, insurance startup lemonade has grown
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dramatically by reaching out to a group of people who are not the usual customers for home renters insurance, and that is millennials. can they hold on? we are going to -- joined by dan schreiber, ceo. also, julie. dan, talk to us about the untapped market potential you see here. there is a lot of buzz around you, but the question is sustainability and how big this market can actually grow. dan: the market is absolutely vast. insurance runs into the trillions of dollars. it affects every household. insurance companies often last for 100, 200 years, which is pretty remarkable. we think this is an untapped and pretty much unlimited market opportunity. we are starting with younger consumers, but we do run up and down the age bracket. the nice thing is that those kind of consumers go through the normal lifecycle events. they become homeowners. they engage in other activities
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that all require insurance. emily: talk to us about your short-term and long-term ambitions when it comes to renters versus homeowners and the domestic market versus the international market. are our ambitions expanding. the company is young. we just marked our third anniversary. our ambitions are both global -- we expect to launch internationally as soon as the end of this year, which is unusual. insurance companies typically start at the water's edge. we are covering homeowners and renters and condos. we are licensed to sell any kind of insurance. you can expect us to be expanding both in terms of the lines we offer and in terms of the geography we cover. they: julie, of course competitors here are traditional insurance companies. who's to say they are not going with then and -- resources they already have?
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julie: that question is a little bit tbd. it's hard for these very old companies to just quickly innovate as fast as a company like lemonade or another startup can. what you've seen them do is start raising funds where they will go out and invest in different -- do partnerships with different startups. that can give them a foot in the water and a way to combat some of this. dan, i wanted to ask you as well, on the reinsurance front, one things you guys have benefited from in terms of taking on these larger companies is reinsurance as had pretty good rates recently, and you guys have locked in some large deals, one with berkshire hathaway from warren buffett. what do you do -- do you expect those costs to remain low? what do you do if they don't? dan: reinsurance does play a central role in our model, in a fairly unconventional way. one of the pillars of lemonade is behavioral economics, how to
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create an insurance company that is not conflicted with its customers, that doesn't make money by denying claims and thereby doesn't engender the kind of distrust that plagues the entire industry. reinsurance for us is part of the solution. lemonade takes a flat fee. if there is money left over at the end of the year, we give it back to charity, to nonprofits of our customers' designation. that means we never have any incentive to deny or delay claims. are reinsurance partners are really -- our reinsurance partners are partners in making this a new on conflicted busin ess model that speaks to consumers, in general, younger consumers, in particular. emily: you had a lot of success in growing very quickly, which has gotten you a lot of big backers like softbank and others. your underwriting is something you said needs some work in the future, which isn't necessarily too surprising just because
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these larger companies that have been around for almost a century have a lot of data on consumers where they can underwrite pretty well. how do you see that improving enough in the future, where you will still be able to lock in these great reinsurance rates and have even potentially better underwriting than someone like aig? dan: i think that's exactly right. larger incumbents look at companies like lemonade and they would like to mimic some of the technologies we have used, some of the marginal messaging. i think that really is just a bit of the tip of the iceberg that is sticking up and is visible to date. 90% of the iceberg, the value that has been created, the transformation that is a foot, is in the data that is being created as a result of those delightful digital interactions. what that means is, whereas traditional underwriting and traditional broker based businesses, we look at a group of one million people, because of on boarding them using 20 data points, it equals one
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million, 10 million -- when you get to a digital interaction with consumers, you get order of magnitudes more insight into them. you start being able to look at risks at a far higher resolution. ultimately, you become best in class in terms of underwriting and pricing risk. what has started off as being fast growth, technology enabled ends up generating been -- the 21st century incarnation of how to underwrite. incumbents because of a legacy,, will have a hard time following. emily: we will continue to watch what you do to attract that younger audience. lemonade ceo daniel schreiber, thanks so much. as well as to leave or hate -- as julie verhag tomorrowe. -- what is this company doing to fight off competition from apple and chinese companies? that's all for now. this is bloomberg. ♪ retail.
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